Philippines warns budget deficit may exceed limit

MANILA (AFP) – - A steep economic downturn could push the Philippines’ 2009 budget deficit more than 40 percent above the targetted limit, Economic Planning Secretary Ralph Recto warned Wednesday.

He said although the budget shortfall could soar to 257 billion pesos (5.3 billion dollars), or 44.4 percent above the set ceiling, the government could handle it with extra borrowing — unless interest rates shot up abruptly.

Last month the government cut its economic growth forecast to between 3.7 and 4.4 percent and raised the deficit ceiling to 178 billion pesos, or about 2.2 percent of gross domestic product (GDP) to boost spending.

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